Another "Insider" question

[Skipper]

If I have to file Chapter 13, it will occur most likely late spring....

Background:

1. I may have an opportunity to sell my interest in a rural piece of land (less than one acre) to a relative. Given the fact that we have have this property for sale for more than two years with NO offers (the real estate agent can attest that there have been very few sales in the region over the past year, as in maybe less than 3, and that the agents in the area know that we will/would look at any offer), my relative has offered approximately 10k for my interest.

2. I would like to take a portion of the proceeds (5K) and pay off a used car that I own (value is 5.5k). I would like to take another portion to use as a down payment on a second used car (maybe 3K), as we will be getting rid of a leased auto that is very expensive.

3. Of the 2k or so that is left, I plan to use a portion to make up an income shortfall for December (no O/T available) and use a portion for an attorney for advice.

Questions (sorry if they are redundant, as I still have concerns);

1. Even though the transaction is with an "insider", it would be my position that the offer is fair, given that the market has been dead for more than a year, and that we have made a reasonable effort to sell the land. Would a Trustee try and place an arbitrary value on the land in absence of recent comps in the area? Also, if the Trustee and I disagree, will the Trustee try to settle for the difference between the sale price and what he/she believes the market value is (how would the Trustee prove it?)?

2. If I do eventually file for Chapter 13, would there be a potential issue with how I use the funds (as I described above), paying the majority of the money (8 of the 10k) to secured lenders?

I am not trying to be deceitful in any way. It is just that I could use the money and I have what I feel to be a reasonable offer on the table, in light of the current market. I don't see the benefit of holding on to something that I may not otherwise be able to sell, when that equity could be used to reduce my secured debt and lower my monthly expenses.

Thoughts?

Again I truly appreciate all of the help.

Skipper

[DeadManCrawling]

If it is fair market value and conforms, in general, to that range, you're fine.

Spending it on secured debts is fine.

I cannot speak for buying another auto. No idea on that one.

Keep records of what you DO spend it on, and be ready to justify the land value.

You can even sell at "distressed" price, in the circumstance, because you are in need of the money. What you cannot do is "give it away" for an amount you would only do for an insider.

Sounds like you have it together properly, but as always, run it by an attorney if oyu can, or put as much time between the transaction and filing as possible. In real estate, I believe the trustee van avoid up to ten years in lookback. But if the value is reasonable and oyu can explain what you did with the money, should be okay. Since a 13 pays back creditors, you would get to keep assets anyway, so I doubt this will be an issue.

[Skipper]

If it is fair market value and conforms, in general, to that range, you're fine.

Spending it on secured debts is fine.

I cannot speak for buying another auto. No idea on that one.

Keep records of what you DO spend it on, and be ready to justify the land value.

You can even sell at "distressed" price, in the circumstance, because you are in need of the money. What you cannot do is "give it away" for an amount you would only do for an insider.

Sounds like you have it together properly, but as always, run it by an attorney if oyu can, or put as much time between the transaction and filing as possible. In real estate, I believe the trustee van avoid up to ten years in lookback. But if the value is reasonable and oyu can explain what you did with the money, should be okay. Since a 13 pays back creditors, you would get to keep assets anyway, so I doubt this will be an issue.

Thank you very much.

Skipper

[AngelinaCatHub]

In a 13, I am a non-brainer, but What DMC said makes perfect sense to me. I do believe you have studied a bit by way of your posting accounts. I second the fact that you have a "plan". However, of course, you should pass it by a lawyer. 'Hub